Gary Liu has been in the CEO’s seat at the South China Morning Post for about 18 months. In that time, he’s turned the stiff (and distressed) Hong Kong-focused media company into a tech-led one with global ambitions.
In many ways, Liu didn’t seem like a natural fit for a big transformational role. He’s young (34 years old when he joined the SCMP). He doesn’t come from the region. And he’s never worked in a newsroom.
But that’s why his insights are fascinating.
I interviewed Liu on stage at the East-West Center’s International Media Conference in Singapore on June 25. Here’s the transcript of most of that discussion. I’ve trimmed it down and edited it for brevity and clarity (though it’s still long). To keep it short, I’ve also left out the Q&A, which contains valuable insights into the way the SCMP works.
Nuances tend to get lost in transcripts. So for the view discussion, watch the video below.
It’s been about a year and 18 months now. I was in your Hong Kong office last week and I was surprised by the energy — something I didn’t see in the old one. People were talking to each other, hanging out, having great conversations, but also doing some great work. And you’ve got a lot more people as well. You’ve basically soaked up talent across newsrooms.
We’re very fortunate. Thank you for training such excellent journalists. (Addressing the audience of media executives.)
If I’m not mistaken, you are also headcount neutral. So while you hired a whole bunch of people, you’re not actually increasing in staff size.
That’s not quite true. We have added over a hundred new incremental headcount, but there has also been a lot of redistribution of resources internally over the course of the last 18 months that has allowed the newsroom to grow by around a hundred. [It’s also allowed] our product and technology teams to grow from 40 people to 120 — tripling in size. So it is a combination of incremental headcount and some redistribution.
So let’s talk about that redistribution. Did you have to lay off people?
No, actually we did not. We took the team that was the production side of our print business — the people who actually ran out printing plant which we still own and operate — and we rolled them out into a separate company.
And so we still do bear a big portion of the cost. We made sure that all of them were locked into contracts that actually gave them a raise on their way out — not the opposite — which a lot of news organizations have done where you outsource your printing to the same group of people and paying them less.
We locked them into contracts that actually gave them a raise. We gave them equal benefits. We gave them equal access to all the facilities within our organization.
We have no intent whatsoever of shutting down the print product. We still believe in it. We love it dearly.
So as you took the team through this transformation, what did you have to do to alleviate some of the anxiety that surely everyone feels?
I would be shocked if that anxiety is completely lifted because transformation is extremely difficult. A lot of the things that we’re asking our organization to believe in is theoretical.
We talk a lot about strategy. And we can articulate it as well as anyone. But until they’re put in play and until our employee see how this allows our news organization to grow — or more importantly, how it makes them better journalists — it’s going to be hard for them to buy in.
When I first arrived, I knew that there was going to be some hard conversations, but I didn’t expect the kind of pushback that I would receive in my first few months.
I met a number of people in the organization. Tenure at our organization is measured in decades, not in years. I was talking to a lot of people who’ve been in our company for 20, 30, 40 years. And the dismissive responses that I got for what I thought would be plans that were very exciting actually shook me a little bit.
I heard more than once: I’ve seen it before; it didn’t work before; wake me up when it’s over.
At the end of the day, I can’t place fault on anyone who has that perception because I think from their perspective, there have been multiple false starts, not just at the Post but probably across the industry here in Asia.
But at the South China Morning Post, there have been multiple false starts. So the question in their mind is: okay, here’s another guy who’s going to come in who doesn’t really understand our business.
You know, they have a legitimate gripe against me because I’m not from the industry. I’m not even from Hong Kong or the Greater China region. What could this person with new ideas actually bring operationally, strategically, practically to make the news organization better?
"The question in their mind is: okay here’s another guy who's going to come in who doesn't really understand our business." @GaryLiu on the transformation of Hong Kong's SCMP.
Let’s talk about that. What was it like for you to walk in there and say, look I’m 34 years old. I’m not from the industry. I’m not from this city. This is what I know. What was the one thing that you sold them on?
I started off not with “this is what I know”. I started off with “this is what I don’t know”.
I’m very fortunate. I joined a leadership team of executives that were best in class. Everything from newsroom operations, to back-end technologies and print operations.
One of the first things I acknowledged not only to them, but to the company as a whole, was that I am an outsider. My expertise is the internet. My expertise is specifically the creation of, distribution of, and the monetization of content across the internet.
For the first six months, I kept my mouth almost completely shut. I spent six months listening and just learning and figuring out what the actual problems were within the organization that we actually had to face.
There was no blueprint when I came in. It wasn’t a situation where it was copy-and-paste.
So through those six months, I spent time with all of the naysayers. In fact, the easiest way to get a meeting with me was to tell me that you didn’t believe in me.
Did you have a line of questioning with the people that you met just to drill down on the problems? And what would be some of these questions you’d ask?
Instead of going through the list of linear questions, here’s what I found out: The number one issue with the news organization that I had inherited was the completely, almost irrational, lack of transparency.
The default operating cadence was that the senior leadership would make decisions behind closed doors. They would communicate just enough for the operational teams to know what they had to do and almost never communicate the reasons why, and certainly never involved most of the organization in decision-making.
I wasn’t there. My articulation or my understanding of how it operated is probably unfair to the regimes and the leadership that came before me. But that was how it was perceived within the news organization, that there was a complete lack of transparency.
I realized that that was the root of a lot of the toxicity in our culture — the lack of trust that existed between the newsroom and the business.
It was also physical. We used to have this codified thing that it was not only the size of your desk, but the height of your cubicle walls that depended on your seniority. So the more senior you got, you could then add levels to your cubicle walls. It does sound funny, but it is true.
So people who never got those promotions would start stacking up papers and magazines and build fake walls. So if you walked through our old newsroom, it was a massive fire hazard.
No communication, lack of trust, lack of transparency. That became the number one issue we had to tackle.
I’m not saying that’s fixed because a decade of legacy takes a long time to unpeel and unwrap. I certainly haven’t earned the respect and the full trust of my team. I have to do much, much more with my leadership.
But I can tell you that if you talk to anyone in my newsroom and in the organization, my guess is that almost all of them will tell you that the way that leadership communicates, the way the organization makes decisions, the way the internal teams operate with one another, is night and day. I will count that as a small success.
We still have a lot more work to do but that I’m very proud of the small changes that we made on transparency and culture.
How do you communicate now? Do you do weekly stand-ups with the entire organization?
Not weekly. That would probably kill me because of the amount of time that it takes to actually plan for these things.
But we went from effectively having town halls whenever the CEO had something to say — which I believe was an average of once every 11 months — to now monthly town halls that last anywhere from 60 to 90 minutes that are broadcast across the entire organization live regardless of what office you are in. It’s also recorded and put on the internal intranet.
We are also completely transparent about our quarterly goals. I will announce every single quarter what the company is trying to do for the quarter, and then three months later, I will announce how we did and actually grade ourselves and be very, very honest.
Each of the major departments also holds their own town halls within the department.
The senior leaders have a much better rhythm of actually sending out emails to the entire organization announcing changes, announcing new hiring, departures of people.
Most importantly, the entire company is now on a centralized communications platform, which is Slack.
And so we have general, and random, and editorial open channels where people can talk about practically anything with one another and issues are debated out in the open. Again, remember it’s just 18 months. It’s still early.
There’s still not as much transparency within the organization as I would like to see. But we have made big strides.
Tell me about some of the mistakes that you made. Surely these 18 months weren’t smooth sailing.
One communications mishap that we had — and this was a big one:
We moved to a new office. Apart from the open format, 50 percent of employees moved on to flex seating, so no more assigned desks. You have a locker. Then you go and find a desk that you want to work at today.
When we announced it, we knew that this was going to cause a little bit of controversy. We massively underestimated how attached people were to physical space and we underestimated how little the attachment was between employee and the company brand.
For instance, if you’re working at Google and somebody tells you you’re moving, most of the time, you’re like whatever because I love working at Google.
But if you don’t have that attachment as an employee to the brand, then your attachment to the organization is something else. It’s certainly not a paycheck because you’re in journalism. So what we realized was that for a lot of people, it was the physical desk that they’ve been at for 10 to 15 years.
We did a terrible job. We just said what’s happening and why it’s happening from a company point of view, but not why it’s happening and how it’s going to make you a better journalist or a reporter or salesperson.
We also did not acknowledge the disruption that it would cost to an operation because it is brand new. We did not talk about the logistics of how we designed the rest of the office to make up for not knowing exactly where you’re going to sit every day. It was a bit of an internal communications disaster. It took a good four months for us to unwind that mistake.
One of the things that we never considered as management is why people wanted to keep their own desk. [They wanted to] leave their stuff on the desk, like name cards. Having to move that box of name cards from locker to the desk every single day is kind of annoying and we had not considered that.
Also, the Hong Kong government still loves to give out paper reports. So [when] you show up to an official Hong Kong government event, you get a binder of information.
So we had to provide the storage to make sure that you could store your binders and that we come up with a scaleable digital solution for digitizing your name cards.
I’m not saying that we’ve gotten this perfect. We were a little bit too arrogant in thinking, we’re giving you this amazing new change you should buy into without us having to explain ourselves.
That arrogance led to a lot more work on the back end. It was a step back in trust that we had to earn our way back from.
The New York Times wrote a piece about you guys a couple of months ago. On the one hand, they were excited about the transformation that was happening, and how you are a beacon of transformation in this region.
But they were also very critical of this so-called independence in your editorial policy. Do you feel that the media industry is a whole misunderstands your mission, your values, and what you’re trying to achieve? Do you feel misunderstood?
I’m not sure it matters whether or not we’re properly understood. I don’t think it affects the way that our newsroom operates and the way that they report. I don’t think it affects the convictions. In fact, I’m pretty sure it doesn’t affect the convictions of our senior editorial leadership or their staff.
It’s a personal frustration because I still feel it’s too easy to default to a simple argument about what it means to report on China and what it should look like, versus the complexity of what it actually looks.
I’ll say that the New York Times article was the most positive article the New York Times has ever written about us. So that’s progress. At least they acknowledge the growth and they acknowledge that we have impact in the world.
The New York Times has every right — and this is the beauty of the industry that we’re in — to question our intent and incentives.
The industry challenging our newsroom on editorial independence and challenging our newsroom on quality is great for me as a CEO.
There is no inspirational speech that I can give that motivates my newsroom better than the New York Times saying that you guys are not being good enough at your jobs.
I do hope that one day that conversation [will be] primarily about the quality of our reporting, the quality of our products, and the impact that that reporting is having in not only elevating the overall global understanding of China, but also in challenging China to be better for its citizens, as well as the world.
I hope that the narrative about the South China Morning Post is based on that and the future, not that “you’re owned by X, so therefore you must be Y.”
"I'm not sure it matters whether or not we're properly understood. I don't think it affects the way that our newsroom operates and the way that they report." -- SCMP's @GaryLiu
Do you ever personally get involved in any of these types of editorial decisions concerning Alibaba and China?
I do not.
If it’s a critical story about Alibaba or a sensitive story about China for example, are you part of that escalation process?
I don’t even think that there’s an escalation process within editorial because the way that the editorial newsroom works is that it is a constant discussion and constant debate. I certainly do not get involved.
I am made aware of certain editorial decisions and why they were made but that’s the extent. As CEO, my job is not to participate in the editorial decision making.
Do you ever feel like you would ever live this one down — this whole issue of China, the issue of ownership?
The issue of China, and the issue of ownership I believe are two different things. It’s probably always gonna be an uphill battle. The choice is just whether or not we’re gonna distract ourselves by fighting it. We have said all we can say about the issue.
My job as CEO is to make sure that my newsroom is not distracted by the constant chatter. Our newsroom proves day in and day out the quality of the work and the objectivity of our coverage.
I was having a really good chat with a young, super smart freelance reporter just the other day and she was saying to me she’s always been interested in the SCMP and would love to work for you guys. But she is most concerned about how China stories are being handled.
As I was before I took the job.
But what I got to do, which this young reporter certainly doesn’t get to do, is I got to go within the organization to question the senior editors and the leadership, and I got to question the incumbent CEO prior to me, and I got to question ownership with the board.
Based on those conversations I believed that the ownership’s commitment to editorial independence was honest and earnest. I believed the strong convictions of the editorial leadership. And therefore I joined.
Over the course of the last year-and-a-half, I’ve been able to judge my editorial leadership and ownership, not based on their words, but based on their actions. Their actions have spoken extremely loudly and absolutely editorial independence is sacrosanct to our newsroom’s ownership.
Alibaba has never once in two years ago of ownership called or asked about a single story and I do not expect them to at all. And the editorial leadership — I talk to them on a consistent basis primarily because I need to learn about China.
So if we were to take a leaf from tech, would you consider putting out a transparency report every quarter about any influence, or stories that you may have dropped or added or stayed away from?
That’s a really good question. That’s a really good suggestion. And that’s something that our editor-in-chief and I should probably talk about.
My immediate reaction is that every newsroom, during the editorial agenda-setting process on a daily basis, makes decisions on stories. So, where are we drawing the line?
Is there an example of that? I would love to see that.
Not that I know. I think it would be interesting to see how you’d structure that. For example, if you were to assign a story and then decide to drop it at the last moment.
I trust my senior editorial masthead, which has been told very specifically that these are things that the masthead needs to discuss and to some degree document.
In the year-and-a-half that I’ve been CEO, there hasn’t been a single instant of a story getting to the one-yard line and being killed because of sensitivity.
The one thing that was adjudicated out in public was when we published an opinion piece, after which the senior editorial team made the decision to pull it from online.
We were transparent about the reasoning. We felt after-the-fact that when we went back to check the facts, we could not actually verify most of the facts of the story.
And so we pulled it. We were honest in our process of why we took it down. That’s the one instance in the last 18 months.
I thought it was very well handled.
Not everyone agrees with you and very frankly we could probably have done that better. I’m glad that we were transparent about it. The SCMP from 10 years ago would never have mentioned why.
We at the very least did. That is a step forward. There’s still many more steps to take. First, if we did not think that we could verify those facts, that commentary should not have gone up in the first place. But our process was broken and it went up. It was unfair to the author, and honestly we put her in an extremely unfortunate situation and we apologized for that. We will still probably continue to apologize.
That’s a process breakdown that we needed to fix that.